The UK gas system is looking “short” today partly because gas flows from Norway and the Netherlands continue to be low.
Today’s market report from npower suggests the gas system is tight again and analysts expect the amount of gas held in the system to drop by around 6% across the day.
Tom Matthews, Client Portfolio Manager at npower said: “Although the Nyhamna outage is now resolved in Norway, flows just haven’t resumed back to the UK. Best reasoning for this has been that the gas prices just aren’t high enough to incentivise flows away from Europe.”
Gas demand has picked up to about 3% above seasonal norms at the moment, mainly because of the stronger demand from power generation and on top of this, exports to the continent.
Despite this, market prices began lower again today, Mr Matthews said: “Markets opened lower again today despite support from the gas system opening short again. The main driver for this has been the euro and carbon.”
The power system is “fairly comfortable” this morning, with wind easing to about half the power it was delivering yesterday afternoon, according to the report, with gas generation picking up to compensate. At around 7.4GW nuclear was also “fairly robust”.
Carbon spent another day around the €6 a tonne mark, said Mr Matthews: “This will continue to put pressure on power contracts especially.”